What should you do if you come into some extra or unexpected money? That may happen to you this month. This is a three paycheck month for many Americans. It’s always a treat to get money you might not have counted on… whether it be an extra paycheck, a tax rebate or Christmas bonus.
I asked some people what they’d spend the extra cash on. The answers were wide-ranging. One guy told me he’d hide it from his ex-wife. Another looked like he could really use it. He said he’d buy a pair of shoes. I loved the answer from a man who said his kids helped him pay for law school later in life. He said, “I spend it on my kids. It goes straight to the kids.”
It may be a sign of the financial times, but we didn’t find anyone who really squandered that extra money. Credit.org has five suggestions for getting the most out of that extra or unexpected windfall:
- Build your emergency savings funds. Set it aside in case you really need it.
- Once that’s done, invest the money in a retirement account.
- Pay down debt. It’ll save you money in interest and fees down the road.
- Put the money towards an extra house or car payment. That could shave years and thousands off your payments.
- Save for important goals, like for college, or a down payment on a house.
What to do with that extra or unexpected money. It’s a great problem to have during these tight economic times. Spend it wisely.